“This morning we welcome Director Richard Cordray, Director of the CFPB, to deliver the bureau’s latest semi-annual report. Mr. Cordray, we recognize that the bureau’s latest semi-annual report may be a little bit dated due to the legal controversy that previously surrounded your appointment and thus delayed your timely appearance. Nonetheless we welcome you today and congratulate you on your recent Senate confirmation.

“The CFPB is arguably the single most powerful and least accountable Federal agency in the history of America. Thus, it is an agency that demands rigorous oversight and, consequently, will undoubtedly demand numerous congressional hearings and inquiries. So again not only do we welcome the Director today, but we look forward to welcoming you to our hearing room for many further appearances before us.

“As all of us know, the CFPB was designed to operate outside the usual system of checks and balances that applies to almost every other government agency.

“Number one, the CFPB is effectively unaccountable to Congress. It is exempted from the Congressional budgetary and appropriations process. Unlike many other agencies, there is thus no check to ensure the CFPB director is spending the people’s money effectively to promote consumer protection, much less effectively in a time of runaway debt and deficits. Not even the agency from which the CFPB obtains its funding, the Federal Reserve, has oversight over the CFPB director’s spending.

“The CFPB is unaccountable to the executive branch. The director, once appointed and confirmed, can only be removed by the president for cause. Neither can the nation’s chief executive enforce spending discipline on the Bureau because it is not subject to the Office of Management and Budget. Nor does CFPB have their own Inspector General.

“I also find it fascinating, as Syria has dominated our national consciousness, that it merely takes a majority vote of Congress to launch military action or to go to war, but it takes a super-majority vote of the Executive Branch Financial Stability Oversight Council to overturn a ruling of the CFPB, and then only if that ruling can be shown to threaten the safety and soundness of the entire U.S. financial system.

“Next, the CFPB is also uniquely unaccountable to the courts. Section 1022 of the Dodd-Frank Act provides that where the Bureau disagrees with any other agency about the meaning of a provision of a Federal consumer financial law, a reviewing court must give deference to the Bureau’s view under the Chevron Doctrine.

“Finally, in many respects, the CFPB is uniquely unaccountable even to itself since there is fundamentally no ‘it,’ no ‘they’ – only a he. There is no commission, only one omnipotent director, fundamentally accountable to no one.

“Combined with this breathtaking lack of accountability is a grant of power under Dodd-Frank to the CFPB Director that is unilateral, unbridled and unparalleled. The director can unilaterally declare virtually any financial product or service as ‘unfair,’ or ‘abusive,’ at which point Americans will be denied that product or service even if they need it, understand it and want it. Be he our credit czar, national nanny or benevolent financial product dictator, Mr. Richard Cordray is now empowered fundamentally to decide what types of credit cards Americans are allowed to have, what types of mortgages they may have, whether or not they can access a pay day lender.

“All of this does beg the question: who will protect consumers from the Consumer Financial Protection Bureau?

“Consumer protection is not a zero-sum game – where for consumers to win producers must lose, or where borrowers can only win when lenders lose. Consumer Protection is not, having powerful government agencies 'nudge' consumers to make 'correct' choices in the belief they are incapable of making rational decisions for themselves.

“When it comes to true consumer protection, and when it comes to the Consumer Financial Protection Bureau, this committee will do everything we can to demand the highest levels of accountability, transparency and answers.”